NZ hedges bets on TPP, joins ASEAN-plus trade negotiations

NZ hedges bets on TPP, joins ASEAN-plus trade
negotiations

By Pattrick Smellie

Nov 21
(BusinessDesk) - New Zealand is hedging its bets on the pace
and success of Asia-Pacific free trade agreement
negotiations, throwing in its lot with the China-led
Regional Comprehensive Economic Partnership, as well as the
Trans-Pacific Partnership championed by the US.

Prime
Minister John Key and his Australian counterpart Julia
Gillard both yesterday attended meetings on the TPP, with US
President Barack Obama, and the RCEP while attending this
week's East Asia Summit in the Cambodian capital, Phnom
Penh.

New Zealand was among the prime movers for the TPP,
and will host the next round of multi-lateral negotiations,
but was also in on the ground floor when the RCEP was first
mooted at a summit of the Association of South-East Asian
Nations (ASEAN) a year ago.

"You never know how these
things are going to play out so it is always possible that
TPP falters and then RECP becomes the significant trade
agreement," Key told reporters at the summit. "Hopefully it
doesn't happen with TPP but you never know."

Gillard
echoed that sentiment, saying: "We're prepared to be in all
starters that can get us there to that broader vision, which
is why we will be there for the [RCEP], which is why we will
be there for the TPP."

Key announced New Zealand's
participation when negotiations are launched for the 16
nation RCEP, which will involve the 10 members of ASEAN as
well as China, India, Korea, Japan and Australia.

While
the New Zealand International Business Forum welcomed the
announcement, anti-TPP campaigner and Auckland University
law professor Jane Kelsey said the competing trade pacts
were proxies for a new kind of Cold War between the US and
China.

“John Key needs a reality check if he really
believes New Zealand can remain best friends with both sides
in the escalating face-off between the US and China over the
‘most significant free trade and investment deal
ever’”, said Kelsey.

"The US-dominated
Trans-Pacific Partnership Agreement is pitted against the
proposed Regional Comprehensive Economic Partnership that
pivots around China as well as India,” she
said.

However, other international reports suggest the
greatest sparring at this week's conference was between
China, Japan and ASEAN nations such as the Philippines over
the escalating tensions created by competing claims to
islands in the South China Sea.

“The TPPA has now become
a geo-political pact. There is a serious risk that
participating governments will sign up for strategic reasons
to a text that surrenders their domestic economies and
grants undue influence over their policy decisions to
powerful, largely US, corporate interests.”

“The people of the participating countries will not
only have no say in the process of either set of
negotiations - they risk becoming collateral damage in a new
version of the Cold War, as old players flex their muscles
in the new arena of competing so-called free trade
agreements.”

But NZIBF chair Graeme Harrison said New
Zealand's involvement in both sets of negotiations was proof
that "New Zealand’s home is in Asia.”

"The
initiation of a free trade negotiation with Japan is
particularly welcome: Japan is now the only Asian economy
with which New Zealand neither has an FTA or a negotiation
underway," he said.

It would also bind in India and China
in a pact which would cover around half the world's
population, more than a quarter of its trade, and economic
activity amounting to around US$23 trillion annually.

"TPP
and RCEP were mutually reinforcing as potential pathways to
a wider Free Trade Area of the Asia Pacific (FTAAP)," said
Harrison.

“There can be many paths to a broader vision
for regional economic integration. New Zealand is fortunate
to be directly involved in both major initiatives. TPP is
further advanced but both TPP and RCEP are
significant.

"Because of its wide coverage RCEP could be
even bigger than the TPP in terms of its contribution to
economic welfare.”

RCEP also becomes a vehicle for
negotiating a free trade relationship with Japan, New
Zealand’s fourth-largest trading partner, and for
improving the chances of an FTA with India, which has
stalled, NZIBF's Stephen Jacobi told BusinessDesk.

He
disputed suggestions the RCEP initiative was being driven by
China.

The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.

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